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Begining
Volkswagen's first factory was christened by Hitler in May of 1934. Hitler's intension for the factory was to create a simple car that was affordable and could seat two adults and three children. He believed this was possible after hearing reports of Henry Ford and his production lines. Hitler’s "people's car" was the lead by Ferdinand Porsche, an automotive engineer who later created Porsche sport cars. Under Hitler's guidance, Porsche altered Hitler's first sketch (shown below) to create the V1 saloon and a convertible V2 , which was produced in the early 1930's. These cars had aluminum bodies mounted over traditional wooden frameworks. Many of Porsche's ideas, like the "boxer" engine, are still used today.

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Making Cars Affordable
Because of Hitler's desire to provide affordable transportation for his people, he designed a program where people could collect stamps and exchange them for a KdF Wagen. KdF stood for "Kraft durch Freude" which meant "Strength through Joy." However, because of the declaration of WWII, inventors were busy working on military vehicles, so the KdF Wagen never passed the prototype stage. Many of the parts that were to be used to construct the KdF wagen were used to build the Kubelwagen. As one can imagine, the people in Germany were very upset that their tickets weren't compensated. Many people tried to take this scandal to court; however, none were successful
kdf_wagen.jpgKdF Wagen red_beetle.jpg

Influence of the Military
Volkswagen began their assistance in WWII with the creation of the Kubelwagen. The Kubelwagen had a higher ground clearance and four-wheel drive, which made it perfect for traveling off-road. However, Volkswagen's paramount military vehicle was the Schwimmwagen. The Schwimmwagen was an amphibious vehicle with a propeller mounted in the rear to enable superior water navigation. Because the factory began producing military weapons, like the V1 'buzz bomb', the factory became a main target for the allied forces during the war. It is estimated that over 3500 V1 bombs hit London before several daylight bombing raids by the US left the factory in ruins. After the war, the allied forces learned that the company had been forcing the Jews to work in factories. Great Britian siezed the company and began to rebuild it. However, it wasn’t until 1945 that the company was completely restored, and given back to Germany. Also, in 1945 Great Britian named the company Volkswagen. On February 17, 1972, the Volkswagen beetle offically became the world’s most popular car beating out Henry Ford's Model "T".

kubelwagen.jpg Kubelwagen schwim-_in_water.gifThe Schwimmwagenschwimmwagen.jpg

Sources
http://query.nytimes.com/gst/fullpage.html?res=9B07E2DB1E38F934A35752C1A960958260

http://www.histomobile.com/dvd_histomobile/histomo/73/history2.asp

http://www.pre67vw.com/history/

http://www.volkswagenspares.com/page.php?page=history

http://www.germansportscars.co.uk/volkswagen.htm

http://www.autoshoppingcenter.com/VW/vw_history.html

http://www.referenceforbusiness.com/history2/25/Volkswagen-Aktiengesellschaft.html